IAG Cargo breaks off from parent group

Tuesday, December 04, 2012

IAG Group, which was formed in January 2011 by merging British Airways and Iberia, has launched IAG Cargo as a separate entity.
As a different division from its parent company, IAG Cargo will focus on welcoming new cargo carriers to IAG, according to a press release.
The new company's first move is advertising, as it will focus on creating a common brand identity to communicate its network reach and products to potential customers. According to officials, much of this investment had already occurred, and the launch of IAG Cargo was a logical end to this work.
“The launch of our brand is an important milestone in our aim of becoming the world’s leading air cargo network," IAG Cargo Managing Director Steve Gunning said in a statement. "For IAG Cargo, uniting our business under this single brand will help us to scale up as new carriers are brought under our banner, while creating a powerful identity that our customers will be able to relate to. In short, it will make it easier than ever to do business with us and help us become even more competitive.”
Last month, the group released solid numbers for the third quarter, showing a 3.5-percent increase in reported commercial revenue, year-over-year. The group also noted increases in cargo volumes and overall yield.
Though the cargo side seems to be on fair footing, IAG Group released last month a transformation plan intended to bring the group back to profitability after record losses. The plan's goals include stopping Iberia's cash losses by mid-year, a fleet and capacity cut, achieving a 12-percent capital return by 2015, and the introduction of new initiatives to increase ancillary sales. Discussions with IAG's unions are ongoing.
In a statement at the time, Iberia's Rafael Sánchez-Lozano expressed the need for an aggressive restructuring. "Iberia is in fight for
survival," he said. "It is unprofitable in all its markets. We have to take tough
decisions now to save the company and return it to profitability. Unless
we take radical action to introduce permanent structural change, the
future for the airline is bleak." - Jon Ross